Dasgupta, Sudipto and Shin, Jhinyoung (1999) Information sharing, information free-riding and capital structure in oligopolies. International Journal of Industrial Organization, 17 (1). pp. 109-135. ISSN 0167-7187
Full text not available from this repository.Abstract
We study the effect of capital structure decisions on the incentives for firms in a duopoly to share information through a trade association. Focusing on the case of Cournot competition with demand uncertainty, we find that the standard result for all-equity firms that information will not be shared may be reversed. When one firm has better access to information than the other, leverage may be a way for the latter firm to free-ride on the former firm's information. With ex ante symmetric firms, a trade association will be formed even if information sharing does not occur.